EDITOR’S NOTE: Councilman Steve Thompson responds to Mayor Javier Joven’s Thursday letter to the editor. Thompson has gone point by point through Joven’s letter. Thompson’s responses are in red.
This letter is in response to the Mayor’s false and misleading letter he released to the media on Thursday June 3rd. I will also tell you the City Manager and his staff have never pressured anyone to get the CO’s the council, we will discuss at the next council meeting. All staff has done is give the council the different tools that are available to finance various infrastructure projects. They also furnished the council with time to be able do whichever financing option made the most sense financially and timely to avoid a potential problem of not being able to deliver water though the citizens of Odessa for today as well into the future. As Councilman for district #2. I have received all the information needed to make this decision on behalf the citizens of Odessa. I also have all the confidence in the world that the City Manager and his team are doing everything the council asks for and I fully support Michael Marrero and all his staff.
Joven: It is probably one of the worst kept secrets in Odessa that, as your Mayor, I am completely opposed to using the loophole in Texas law that allows cities to issue massive amounts of debt without taxpayer approval. Fighting against the abusive nature of certificates of obligation – COs – was a major element of my recent mayoral election campaign.
Thompson: This is not a loophole, but rather one of several mechanisms available to cities, counties and other governmental entities to fund important infrastructure projects. CO’s have been used by the City of Odessa to build parks, roads, fire stations, police facilities and expand water and sewer facilities. Ector County recently issued $25,0000 in Co’s for the new Juvenile Detention Center. The City of Midland earlier this year issued over 50 million for various infrastructure improvements.
Joven: However, my vote NO in the upcoming Tuesday city council meeting has as much to do with the incomplete job Odessa city management has done in defining the need and the uses for this new $100,000,000 debt package as it does with my unwillingness to saddle Odessa taxpayers with additional massive debt that can only result in sharply higher tax bills and water rates.
Thompson: The Water Treatment Improvements project began under the previous City Manager. The plant is a 1950’s era plant. An initial evaluation of the plant began in early March 2016 with the intent to recommend ways to optimize operations, assess existing conditions and prioritize improvements. The study was presented to the City in January of 2017. In late 2018 the City engaged Carollo Engineers to begin design of the rehabilitation of existing facilities, design for new facilities, design of electrical and SCDA improvements. Improvements under this scope of work were identified with the goal of replacing and/or improving existing processes, making structural and safety improvements, meeting current TCEQ regulations and increasing water productively reliability of the Water treatment Plant.
Joven: After numerous workshops and sessions, Odessa city management has yet to present a clearly defined plan for the improvements that are needed by our water treatment plant. In fact, the engineering for the plant improvements is still incomplete despite having had over $14 million allocated to the project by the Odessa City Manager, Michael Marrero. No scope of work has been defined, no bids have been solicited, and no solid budget estimates have been provided to the Odessa City Council by city staff.
Thompson: Since the City engaged Carollo for the design City staff and the Engineering firm have worked on finalizing design of the water treatment plant rehabilitation. Over the course of multiple months and through the review and comments provided by the City, on May 11, 2021, The Engineer provided the City a 95% completed design plans.
The City Manager does not have the authority to allocate $14 million to a project. That can only be done and was done by the prior City Council.
Joven: Despite all of the things we don’t yet know or understand about the needed improvements and repairs to the Odessa water treatment plant, City Manager Marrero continues to push the City Council for a quick vote on this debt package despite the tens of millions of dollars of unused funds still left unspent in the 2019 $93,000,000 debt issuance.
Thompson: The $93 million debt issuance by the city of Odessa was four significant public works projects. That included two new fire stations, a police multipurpose building, an animal control shelter, improvements to Floyd Gwinn park, various road and drainage projects and new office space for city staff. All funds in the 2019 debt issuance have projects identified for their use. Of the $93 million issued $60 million have been contracted, awarded, spent or encumbered. Projects often take time to be designed, bid, awarded and construct. A large portion of the dollars remaining are for projects that have been started and not yet completed.
Joven: In fact, until just months ago, the City of Odessa had over $25 million left unspent from the $51 million debt package issued in 2013. Due to poor city management taxpayers paid seven years of interest on over $25 million while it set idling in a city account. This debt, like the currently proposed debt, was issued via certificates of obligation which were established by the Texas legislature to help respond to urgent emergencies such as natural disasters. Waiting over seven years to even begin projects hardly constitutes an emergency in my mind.
Thompson: The City is required to post on our website annually the details of our outstanding debt and any unspent proceeds – In March 2020 (due date to post 9-30-19 annual information) we posted unspent cash and investments of $25 million on the 2013 Cos as of September 30, 2019. Plans, engineering and contracts had been completed on the University Widening project, downtown street and light rehabs and other minor park projects – but the money had not been paid out yet. This is what comprised the $25 million.
In March 2021, the City posted the updated information as of September 30, 2020.
Joven: This, in addition to the tens of millions of dollars the city has received and will continue to receive from the Pioneer water sell agreement, provides the city more than ample resources to complete planning on the water system improvements, develop a realistic budget for the work, look at existing and projected future sources of revenue and, if necessary, seek voter approval for additional funding for the needed repairs. I see no need to begin the interest clock (over the life of the proposed COs taxpayers will spend over $33 million in interest alone) until we have a real understanding of our needs, and we have solid budget numbers for the repairs.
Thompson: The Pioneer money comes in over time and repairs to the water treatment plant are needed sooner rather than later.
Joven: I suspect that the Odessa city manager’s desire to rush through another debt package has more to do with his fear of losing his ability to push through future massive debt packages should the composition of the city council change in the next election than it does in any real belief that repairs to our water treatment plant constitute an emergency that requires the immediate issuance of taxpayer debt.
Thompson: It is not the city manager who pushes these projects , but rather the City Council or at least the majority of the City Council. We have discussed this particular topic at least on 4 different occasions since January of 2021. All council members have heard the information from both city staff and the contracted engineering group on the required improvements to the water treatment plant. We have also heard from the city’s financial advisor at least two different times on the debt issuance.